An employee starts working at the age of 22 at an annual salary of $50,000. She hopes to get an average increase of 3% each year. Every year, her retirement plan requires her to contribute 8% of her annual salary and the employer will contribute 35% of her contribution (i.e. the employee contributes $4,000 to the retirement fund in year 1 and the employer contributes $1,400, making the balance $5,400. The current balance in the retirement fund earns an annual return of 8% which is applied to the next year. This means the year 2 balance is the year 1 balance plus 8% return on the year 1 balance plus the year 2 employee and employer contributions.

a). Name a tab on your Excel workbook draft file as "question 7" and develop an Excel model for retirement planning. Extend this model up to 65 years of age. PLEASE ATTACH THE EXCEL WORKBOOK as a file.

b). How old will this employee be when the retirement balance grows to $1million? What is the retirement balance at the age of 65?

c). Suppose the yearly salary increase is not fixed at 3% but randomly varies between 1 to 5% based on a uniform distribution. Which Excel function will you use to generate this yearly increase? In this scenario, how old will she be when the retirement balance grows to $1 million?

d). Keeping the salary increase as uniformly random as in part b, assume the return on investment is not fixed at 8% but randomly follows a normal distribution with a mean of 8% and a standard deviation of 1%. Which Excel function will you use to generate this return on investment? In this scenario, how old will she be when the retirement balance grows to $1 million?